1. Lecture 15 Accounting Cycle Practice questions
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2. Practice Question 1
Laeeq Ahmed, a certified public accountant, resigned from his position in order to start his own practices. The business transactions were incurred during the month were:
Sep 1. Ahmed opened a bank account in his name by depositing Rs with he had saved over a period of years.
Sep 10. purchased small office building at a price of Rs of which Rs was related to land and to building. A cash payment was made Rs and note payable was issued for the balance amount
Sep 15. purchased a micro-computer from computer store for Rs.4680.

4. Sep 19. purchased office furniture, from furniture shop at cost of Rs
Sep 19. purchased office furniture, from furniture shop at cost of Rs a down payment was made Rs.720 and balance in three equal installments due on Sep 28, Oct 28 and Nov 28. purchase was made on open account with out any note.
Sep 26. Rs.140 monitor purchased for computer Sep 15 stopped working. The monitor was returned to store which promised to return within five days.
Sep 28. paid for furniture first installment.
Sep 3o. Received Rs.140 cash from computer store.
Requirement:
Pass necessary journal entries and their ledgers.
Make a trial balance

6. Practice Question 2
Mr. Naeem started business of renting tool equipment to its customers. Business was started on May 1. Following were the transactions incurred during the month of May
May 1. Naeem opened bank account in his name with the deposit of Rs cash.
May 2. Naeem bought land for use in its operation at cost of Rs A cash down payment of Rs was made and note payable within 90 days was issued for balance.

7. May 5. a movable building was purchased for Rs
May 5. a movable building was purchased for Rs and installed on the lot.
May 10. equipment was purchased on credit from the Ace Tool Company at cost of Rs A/P was to be paid within 90 days.

8. May 31, a cash payment of Rs was made in partial settlement of the note payable issue on may 3.
Requirement:
Pass necessary journal entries and their ledgers.
Make a trial balance

9. Complete Accounting Cycle

10. Practice Question 3
Mr. Abdullah after completing his medical education, establish his own practice on May 1. the following transactions occurred during the first month.
May 1. Abdullah opened a bank account in the name of Abdulla Clinic by making deposit of Rs
May 1. paid office rent for may Rs. 1700
May 2. Purchased office equipment for cash Rs.7200
May 3. purchased medical instruments from Niles instruments Inc. at a cost of Rs A cash payment of Rs was made and a note payable was issued for the remaining Rs

11. May 4. Retained by Rafi construction to be on call for emergency service at a monthly fee of Rs the fee for May was collected in cash.
May 15. excluding the retainer of May 4 fees earned during the first 15 days of month to Rs of which Rs. 600 was in cash and Rs was in account receivable.
May 15. paid Noman a staff nurse salary for the first half of May Rs
May 16. Dr. Abdullah withdrew Rs. 975 for personal use.
May 19. Treated patient for minor injuries employee from Rafi construction.

12. May 27. Treated patient who paid Rs
May 27. Treated patient who paid Rs. 25 cash for an office visit and who agreed to pay Rs. 35 on June 1 for laboratory medical tests completed May 27.
May 31. excluding the treatment of patient on may 27 fees earned during the last half of month amounted to Rs of which Rs was in cash and Rs was in account receivable.
May 31. paid Noman a Staff nurse Rs salary for the second half of month.
May 31. received a bill from Sialkot medical supplies in the amount of Rs. 640 representing the amount of medical supplies used during May.
May 31. paid utilities for month Rs. 300.

13. Other Information
Dr. Abdullah estimated the useful life of medical instruments at three years and of office equipment five years.
Requirement:
Prepare necessary journal entries
ledgers.
Make a trial balance
Adjustments
Adjusted Trial Balance
Income Statement
Balance Sheet
Closing entries
After closing trial balance

14. Sample Financial Statements

15. Income Statement Interest Income 1000 Interest Expenses 500
Net Interest Income
Fees and Commission Income
Fees and Commission Expenses
Net Trading Income
Other operating income
Total Non Interest Income
Operating Income
Staff Cost
Premises Cost
General Administrative Expenses
Depreciation and amortization
Operating Expenses
Operating profit before impairment losses and taxation
impairment losses and taxation
Profit before taxation
Taxation
Profit for the year

16. Income Statement Sales Revenue 1000 Less Cost of Goods Sold 500
Gross profit
Operating Cost:
Selling General Administration Expenses
Operating profit
Less other interest expenses
Profit before taxes
Provision for income tax
Less Minority interest
Net Income

18. Income Statement Sales Revenue 1000 Less Cost of Goods Sold 500
Gross profit
Operating Cost:
Selling General Administration Expenses
Research and Development Expenses
Interest Expenses of financial assets
Other operating expenses
Total Operating cost
Operating profit
Less other interest expenses
Add other interest income
Profit before taxes
Provision for income tax
Add Equity in earning of unconsolidated companies
Net Income

19. End of Lecture 15